DuPont Decomposition
Why does VMART earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.7% = 1.4% × 1.33 × 3.01
Latest: FY2025
Profitability
Net Margin
1.4%
-1.5% →1.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.33x
0.90x →1.33x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.01x
3.23x →3.01x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.0 pp over 3 years. Driven by net margin improving (-1.5% → 1.4%), asset turnover improving (0.90x → 1.33x), leverage falling (3.23x → 3.01x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -1.5% | 0.90 | 3.23 | -4.3% |
| FY2024 | ₹0Cr | ₹-0Cr | -1.4% | 0.98 | 3.81 | -5.2% |
| FY2025 | ₹0Cr | ₹0Cr | 1.4% | 1.33 | 3.01 | 5.7% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.